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The Department of Housing and Urban Development intends to propose a rule on downpayment assistance money provided by government entities, this time with proper notice to stakeholders and an appropriate comment period.

In a recent court filing, HUD Acting Associate Deputy Assistant Secretary Julie Shaffer said the agency aims to follow proper rulemaking procedures under the Administrative Procedures Act to promulgate previous guidance regarding downpayment assistance provided by government entities. She did not provide a timeframe, however.

The guidance barred such entities from providing DPA outside of their jurisdictions, affecting – in particular – Native American tribes that offer DPA through FHA lenders.

One such tribe, the Cedar Band of Paiutes, earlier this year sued in federal district court in Utah to stop HUD from enforcing the new rule. For the full story, see the new edition of Inside Mortgage Finance.